According to the Sun Sentinel, numbers given by the U.S. Bankruptcy Court in Miami show that personal bankruptcy filings are 40 percent higher in 2010 than they were in 2009.
Last year the total number of bankruptcy filings for Palm Beach, Broward and Miami-Dade counties was 24, 681. This year that number increased to 34,579. Nationally, personal bankruptcy filings numbered 1.53 million in 2010, nine percent higher than in 2009. That number was the highest since 2005, where numbers reached 2.04 million when many sought bankruptcy protection before a change in federal law making filing more difficult
According to a local attorney, many individuals filing for bankruptcy work in industries such as construction and real estate, as well the professions and business. In some cases, high net worth clients owning multiple properties have had to file for Chapter 7 bankruptcy since they were ineligible to file for chapter 13 bankruptcy.
In chapter 13 bankruptcy, an individual reorganizes and consolidates their debt and goes on a payment plan. If the individual cannot make payments, they are converted to Chapter 7 bankruptcy. Under Chapter 7, foreclosure is stopped for four to six months. Over 70 percent of filings in South Florida for the month of December were under Chapter 7.
Several factors affecting data for the 2010 year were the rising numbers of home foreclosures, continued unemployment and failing businesses. South Florida’s unemployment rate for the month of November was 12 percent, the highest of any metro region statewide. The national unemployment rate last November was 9.8 percent, and currently sits at 9.3 percent.
While the total number of bankruptcy filings is higher for 2010, the number has been declining since September. Attorneys say the decline has to do with the decrease of foreclosure filings due to system-wide foreclosure delays-Florida has one of the greatest delay times between mortgage payment default and referral for foreclosure. A further problem is that the bankruptcy system itself is backed up and delayed due to paperwork issues, which some believe to be caused-at least in part-by illegal filing.
Source: Sun Sentinel, “South Florida Bankruptcies up 40% in 2010,” Marcia Heroux Pounds, 3 Jan 2011.
